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Three quarters of state and local government workers were in defined benefit pension plans in 2016

May 03, 2017

In March 2016, 75 percent of state and local government workers participated in defined benefit pension plans. Of these workers, 57 percent participated in frozen defined benefit plans, or plans that are not open to new employees.

Percentage of state and local government workers who participated in open versus frozen defined benefit pension plans, March 2016
Worker characteristic Plans not open to new employees Plans open to new employees

All workers

57% 43%

Teachers

58 42

Protective service

52 48

Full time

58 42

Part time

54 46

Union

63 37

Nonunion

52 48

Lowest 10 percent of wage earners

52 48

Highest 10 percent of wage earners

69 31

Source: U.S. Bureau of Labor Statistics.

For 98 percent of workers who participated in defined benefit pension plans, employee benefits are based on a percentage of their earnings during a specified number of years, usually at the end of their careers. The other 2 percent of workers participated in cash balance plans, where employees are credited with a specified contribution and a rate of interest on the contribution; the benefits are provided as a lump sum and may be converted to an annuity.

These data are from the National Compensation Survey — Benefits program. To learn more, see National Compensation Survey: Retirement Plan Provisions in State and Local Government in the United States, 2016. Defined benefit pension plans provide employees with guaranteed retirement benefits based on benefit formulas. A participant’s retirement age, length of service, and preretirement earnings may affect the benefits received. For more definitions of benefits terms, see National Compensation Survey: Glossary of Employee Benefit Terms.

SUGGESTED CITATION

Bureau of Labor Statistics, U.S. Department of Labor, The Economics Daily, Three quarters of state and local government workers were in defined benefit pension plans in 2016 on the Internet at https://www.bls.gov/opub/ted/2017/three-quarters-of-state-and-local-government-workers-were-in-defined-benefit-pension-plans-in-2016.htm (visited December 02, 2020).

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